$12.47

1.67 (15.46%)

10/13/2008 1:09 PM

Helix Energy Solutions Group, Inc. (HLX)

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An international offshore energy company that provides development solutions and other key services to the open market as well as to its own reservoirs. Its oil and gas business is a prospect generating, exploration, development and production company.

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Ticker Tags

Oil & Gas Drilling & Exploration (126), Oil & Gas Equipment & Services (77), Mid Cap (670), Small Cap (1922), Services (251)
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Helix Energy Solutions Group, Inc. At A Glance

Current Price:	$12.47
Last Trade Time:	10/13/2008 1:09 PM
Open:	$11.72
Previous Close:	$10.80
Daily Range:	$11.10 - $12.47
52-Week Range:	$9.85 - $47.35
Volume:	2,726,837
Market Cap:	$2.62B
P/E Ratio:	6.98
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Stock Trends

HLX VS S&P 500 (SPY)

News & Discussion Boards

Other News Headlines for HLX

Movers roundup: Repros Therapeutics, Helix Energy
9/29/2008 2:35:00 PM - AP
Helix Energy shares tumble on storm concerns
9/29/2008 1:54:00 PM - AP
Helix shares drop on lower production estimates
9/24/2008 6:43:00 PM - AP
Movers roundup: Helix Energy, Saks
9/24/2008 2:13:00 PM - AP

More Headlines...

Top Bull Pitch

Recs

13 Helix Energy Solutions Group, Inc. (HLX)

Avatar Favorableodds (46.53) Submitted: 3/17/08 2:46 PM

HLX is an aggregation of complementary businesses; finding/developing oil & gas (E&P), and contract servicing for oil and gas producers. The contracting service unit can be divided into shallow and deep water operations (management has deemed the shallow segment non-core going forward).

The market...More

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HLX is an aggregation of complementary businesses; finding/developing oil & gas (E&P), and contract servicing for oil and gas producers. The contracting service unit can be divided into shallow and deep water operations (management has deemed the shallow segment non-core going forward).

The market doesn't seem to get HLX's double barreled approach, despite its strategic appeal, and is offering savvy investors the opportunity to purchase a large and growing stream of income through its contracting segment, as well as substantial oil and gas properties at a modest price.

Their proprietary technology in the deep water realm, should fuel large and rising margins for the foreseeable future. Add some very interesting drilling equipment that is difficult and time consuming to replicate, and a promising group of conservative development properties which can be drilled at their leisure as contracting rates decline and a very attractive long term dynamic begins to emerge.

By the end of '08, a variety of catalysts will drive this stock considerably higher...especially as the market comes to its senses and rewards this business with a much more appropriate valuation, one commensurate with the value of its underlying asset base as well as its rapidly strengthening earnings power. High oil prices, and the tight services market should provide quite a tailwind...but its rapidly growing contracting backlog and the addition of 3 new upgraded vessels (during the 4th quarter) with the ability to lay pipe under water and hence to contract new rates at considerably higher prices...as well as 3 new oil fields that should come online during the second half of the year (which should double HLX's current run rate on production) should be more than enough for the street to sit up and take notice.

The bottom line is that Helix is close to emerging from a heavy investment phase, and should hit an inflection point regarding it's free cash generation capabilities by the end of the year...when it does, Mr. Market is likely to have a change of heart, with the result being shares trading hands at prices significantly above today's level.

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Recs 0 (HLX) Compunction (83.92) Submitted: 10/13/08 11:35 AM : Start Price: $16.09 HLX Score: -21.13 This stock is broken for no reason. I see no reason why this stock isn't seeing $35. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (HLX) CMOCapital (96.43) Submitted: 10/08/08 3:35 PM : Start Price: $16.40 HLX Score: -21.06 Restructuring Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (HLX) TomFoolNC (79.10) Submitted: 10/07/08 11:42 AM : Start Price: $18.27 HLX Score: -24.86 GleenLight Capital Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 2 (HLX) ValueArbitrage (76.84) Submitted: 10/02/08 7:34 AM : Start Price: $36.03 HLX Score: -43.17 HLX is simply to cheap for a (primarily) capital light, competitively advantaged company with above average growth prospects and a long paper trail of earning above average returns for its shareholders. Reasons for my conviction stem from its ludicrous current undervaluation (based on almost any metric, relative and absolute) as well as the variety of levers management has at its disposal to improve profitability and grow the top and bottom line over the next few years. For one, HLX is emerging from a heavy investment phase and should hit an inflection point regarding it's free cash generation capabilities at some point over the next year. A few additional levers that mangement may utilize to drive returns over the next few years include... 1. The spin-off or outright sale of its more capital intensive E&P business (in the case of a spin-off I believe both companies would warrant higher valuations as independent pure plays rather than continuing as a combined entitiy). 2. Execution of revenue and margin enhancement strategy. I believe this likely for a variety of reasons, a few of which include... On the sales side of the equation... Future sales growth should be achieved through continued growth within its rapidly growing contracting segment. Underlying business drivers here include the addition of 3 new upgraded vessels (during the 4th quarter) with the ability to lay pipe under water. Demand for such vessels is considerable, and likely to only get stronger (at least for awhile). I expect additional top line growth on the E&P side as well. 3 new oil fields are scheduled to come online during the fourth quarter, with full production by the second half of '09 (which should roughly double HLX's current run rate). Higher oil prices and the tight services market should provide a decent tailwind here. On the margin side of the equation... Margin expansion should be driven by a combination of increasing asset utilization, reduced costs (less maintence capex), and a mix shift to its faster growing, higher margin business going forward (to name a few). On the contracting side...the addition of the 3 new upgraded vessels (with enhanced capabilities) should allow HLX to deploy these ships at new, more profitable rates going forward. Considering these vessels are expensive, difficult to replicate assets, as well as HLX's formidable (proprietary) expertise working with these type of assets in the deep water realm...I believe shareholders should benefit from large and rising margins within this segment for the foreseeable future. i.e. I don't expect serious competition to drive down margins and hence returns for quite awhile (I expect the opposite). Also previous investments in their E&P properties should bolster margins over the near to medium term. With 3 new fields coming online shortly (consider these fields ability to ramp up to full production relatively quickly as well), it doesn't take a genius to realize significant margin expansion within this segment is likely. Due to the natural operating leverage of the E&P business, this segment should begin to drive profitability considerably higher over the next year or so as new production kicks in (as sales increase while fixed and variable costs decrease, causing margins to expand) and profitability explodes. Lastly, a longer term mix shift to the faster growing, higher margin services segment (currently 70% of revenues) and ongoing improvements in HLX's cost structure should make future growth meaningfully more profitable than what a careful study of historical results would indicate. For instance, Capex for the E&P segment is much larger than capex for HLX's service's segment. Therefore, as management begins to focus their attention more on the growth of the service segment (over time representing more and more of Helix's revenues), capex will grow at a slower and slower rate. I believe the market is likely to reward any visable improvement on these fronts, which should begin to manifest themselves in relatively short order. Now that Owen Krantz is back at the helm, I believe execution here is likely, as this is a man who historically has consistently underpromised and overdelivered. Why should I expect the future to be any different. 3. Value added capital allocation (paying down debt, buying back stock, etc.). Management has a variety of non-core assets to divest if the price is right, which if monetized would bolster HLX's cash position and increase their flexibility to add value in this area. The bottom line... Considering HLX's historical profitability and future outlook, its savvy and shareholder friendly management team, and the positive underlying business dynamics currently underway...this misunderstood and underfollowed company is grossly mispriced. When examined through a normalized margin and profitability assessment, HLX in my opinion is screamingly cheap. Investors who purchase shares at or around today's price should reap outsized risk-adjusted returns of 50-100% over the next 2-3 years Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (HLX) al5ace (47.65) Submitted: 9/25/08 10:28 AM : Start Price: $26.43 HLX Score: -34.01 Offshore oil services. Lots of value in the businesses and books. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out.
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